Asia's Arc of Advantage - icrier

I.vi Perspectives on Economic and Security Ties
between India and Southeast Asia
G. V. C. Naidu
At present, two dominant trends are seen in East Asia: there is vast economic dynamism,
leading to the rise of an entire region but there are also serious security challenges that could
potentially undermine regional peace and stability. Since we are still stuck with a ‘post-cold
war’ framework and existing security multilateralism has failed to live up to expectations, there
is an urgent need to work toward constructing a new security paradigm. East Asia is highly
complex, marked by enormous fluidity. At present, it is transiting toward a new order although
it remains unclear what the new order is likely to be and when it will come about. Managing the
current transition, therefore, is as much a challenge as fashioning a new regional security order.
In this process, it is necessary to take into account the emergence of the Indo-Pacific as the new
geostrategic construct, India’s own pivot to East Asia, Japan’s ‘re-balancing strategy’ toward
Southeast Asia under Shinzo Abe and America’s renewed commitment to remain engaged with
the region as a resident power.
India-Southeast Asia Economic Relations
Economically, India is still a marginal player, although nearly 32 per cent of India’s trade is with
East Asia. As compared to ASEAN-China trade that stood at US $401 bn in 2012, India’s trade
with ASEAN was barely $80 bn. While ASEAN’s share in India’s overall trade was 9 per cent,
India accounted for less than 3 per cent of ASEAN trade. India appears to have failed to leverage
its economic strengths although, in PPP terms, the combined ASEAN GDP is about 2/3rds
of India’s. A major drawback is that India has failed to become a part of regional production
networks. Hence, it has to make serious efforts if it wishes to participate meaningfully in regional
economic integration. Yet, India’s advantage is that it offers an option to ASEAN, especially in
reducing excessive dependence on China for economic opportunities.
India-ASEAN Security Co-operation
There are few constraints within the ASEAN countries on the question of security cooperation
with India. Although member states have widely varying security perceptions, one can see
remarkable progress, especially since the early 2000s, in establishing defence co-operation links
with India. A close scrutiny reveals that the strategic/defence co-operation dimension of India’s
Look East Policy appears to be emerging far more robust and tangible than other facets. Begun
as simple CBMs to allay ASEAN fears about the Indian Navy’s potential for power projection
in the late-1980s, co-operation was initially limited to simple passage exercises with Indonesia
and Malaysia, but these have since gradually spread to most other countries. While ASEAN’s
initial motivation to look at India was driven by concerns about post-cold war uncertainties, in
particular because of China’s rise as a military power, China’s forceful claims in the South China
Sea, and the general perception Beijing has generated that it was seeking to build a China-led
hierarchical system in East Asia, it has gained enormous momentum for a variety of other
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